Why Budget Is Important
Knowing how to budget is one of the most important financial habits you can adopt. In short, it is the process of creating a plan to spend your money. However, if you’ve never lived on a budget, or haven’t experienced all the benefits that budgeting has to offer, it can be easy to wonder why it’s such a vital aspect of personal finance. There are the obvious reasons such as saving money and helping you escape debt, but there are also a whole host of other reasons you should be aware of. So, without further ado, here is why budget is important!
Why Budget Is Important: Top 10 Reasons To Budget
1. Budgeting Helps You Control Your Spending
That Starbucks you have every day or that endless stream of Amazon packages that seem to be magically appearing at your front door probably aren’t doing your finances the world of good. Budgeting makes it much easier to see exactly what you’re spending each month so you can keep a close eye on your daily spending habits, understand the impact of seemingly small expenses, and take control of your spending.
2. Budgeting Keeps You On Track For Your Financial Goals
Along the same lines of controlling your spending, one of the main reasons why budget is important is that it keeps you on track when you are trying to achieve your financial goals. In order to achieve a goal, you need to stick to a plan, and stay focused on a clearly defined process; and that’s why budget is important.
3. Budgeting Can Help Your Marriage
If you are married, it goes without saying that your budget plays a hugely important role in keeping you and your partner on the same page. It allows you to plan your financial future together, as well as hold each other accountable, and make sure you are fighting on the same team. Money is one of the most common reasons for arguments so budgeting is a great way to overcome this!
4. Budgeting Helps You Find Financial Contentment
Financial contentment is one of the foundational components of good financial behavior as it stops you from spending money you don’t have and allows you to enjoy your financial journey. Just remember to focus on your own budget and your own life, don’t compare yourself to others and their spending habits as this will only be detrimental in the long run.
5. Budgeting Stops You From Feeling Financially Overwhelmed
Chances are you’ve got enough on your plate without having to worry about your finances as well! One of the top reasons why budget is important is that it’s a great way to fight financial overwhelm. In short, you never spend beyond your means, you are always super prepared for unexpected expenses, and fewer things have the ability to jump up and scare you!
6. Budgeting Helps You Avoid Or Get Out Of Debt
You need to stop watering down your monthly income by using a large sum of it to pay somebody back for things you couldn’t afford in the past. Budgeting can help you escape debt, or plan your finances so you can avoid it in the future!
7. Budgeting Keeps You Organized
Disorganization and finances are hardly a match made in heaven. The longer you live without a budget, the easier it becomes for your financial life to get messy. In short, it’s much easier to budget and keep your financial life organized, than it is to try to get your finances in order after you have allowed them to get disorganized.
8. Budgeting Helps You Prepare For Emergencies
Life is full of all sorts of emergency expenses. From hospital bills to unexpected home repairs, budgeting can help you prepare for any situation life throws your way. It is recommend you save at least 3 to 6 months worth of living expenses but this is a tall order for even the most expert budgeters so just try to save as much as you feasibly can.
9. Budgeting Helps You Save Money
Well duh! I have talked about this, albeit indirectly, but arguably the most vital reason why budget is important is that it helps you save money! Don’t fall into the trap of delayed spending though i.e. saving money just to splurge it on something big. The key is to eliminate waste and hold yourself accountable for any financial decisions. I’m not saying don’t treat yourself, but also enjoy having a little more disposable income just sitting in your bank account.
10. Budgeting Helps You Get (And Stay) Ahead
Again, this might also be a little obvious after everything we’ve talked about. Being frugal and abiding by a budget can help you build the financial life you’ve always dreamed of! To put it in the simplest of terms, if you want to finally get ahead in your financial life, start living on a budget.
